To buy or not to buy?
Published on Thursday 25 September 2008
Is it really all bad news as far as the property market is concerned at the moment?......Find out what the experts say......
As it happens.....NO. Indeed, while many agents experienced a slow start to the year, they are now seeing both instructions and sales pick up. Despite all the doom and gloom in the press and elsewhere, there is acutally no such thing as a "bad" or a "good" market. You either have a sellers market or a buyers market - and each has its advantages and disadvantages depending on which side of the equation you fing yourself.
But what if you are both a buyer and a seller - as most of us are? According to the familiar ‘swings and roundabouts' argument, the net effect should be negligible, since what you lose as a seller, you gain on your next purchase- or vice versa, in the case of a sellers' market.
However .... I'm sure many of us know people who, by their seemingly uncanny ability to read the property market, have done extremely well out of it. What is their secret? Generally, it can be summed up in one word - timing.
But surely, according to the swings and roundabouts theory, there's no such thing as a good or bad time to move house? Well actually, that's not entirely true. Take the current market, for example. With prices falling, this is actually the ideal time to trade up to a larger property. That might sound bizarre, with all the scaremongering about the credit squeeze, and so on. And of course, affordability should always be uppermost in all our minds.
But just think about it. Your current home is worth, say £200,000 while the place you want to buy is valued at £300,000 - a difference of £100,000. Now, let's assume that prices fall by 20%. Your current property is now worth £160,000 but the one you want to buy is only £240,000. The difference has shrunk to £80,000 - and you are potentially £20,000 better off.
In a completely free market like property, there are few hard and fast rules. One of those, however, is this. If you have some choice over when you move home, always try to trade up in a falling market, and down in a rising market. That way, you will gain maximum benefit from the differential movement in prices.